Our software does the initial notice for you.
Employers offering a QSEHRA are required to provide all eligible employees with a notice that includes the following:
- The employee’s permitted amount for the year;
- An instruction to provide that information in any application for an Affordable Care Act (ACA) exchange premium subsidy; and
- A warning that the employee may be taxed under the ACA’s individual mandate, and owe income tax on QSEHRA reimbursements, unless he or she obtains “minimum essential coverage.”
The IRS waived the notice requirement for 2017. For 2018, the notice requirement in in place. Our clients are pleased to know HRA Plan Docs creates the notice and delivers it with your plan documents, ready to distribute. We also provide clients with a "fillable" employee notice for new hires.
The employee’s permitted amount for the year.
The initial notice is distributable to all employees that will be eligible on the first day of the plan. For new hires, clients will have to use the fillable template. Because the law requires the notice provide the employee’s permitted amount for the year, employees that are not eligible for the entire year will have a prorated benefit.
Our fillable template has six fillable fields, here is how to complete them:
- Sponsoring employer's legal business name (as it appears on the plan document);
- The plan's effective date;
- Full Time or Part Time (who is the notice for);
- Maximum annual contribution, employees without dependents: monthly allowance times the number of eligible months. (remember, the QSEHRA is a calendar year plan);
- Maximum annual contribution, employees with dependents: monthly allowance times the number of eligible months. (remember, the QSEHRA is a calendar year plan);
- Plan administrators name and address (business address is acceptable).
The law requires an eligible employer to furnish a written notice to its eligible employees at least 90 days before the beginning of a year for which the QSEHRA is provided (or, in the case of an initial plan year or an employee who is not eligible to participate in the arrangement as of the beginning of such year, the date on which such employee(s) is/are first so eligible).
The penalty for failing to provide timely notices is imposed as a tax of $50 per employee per incident of failure to provide such notice with an annual maximum of $2,500, unless it is shown that such failure is due to reasonable cause and not willful neglect.